scott olson
A San Francisco jury ruled in favor of Tesla founder Elon Musk on Friday in a shareholder class action lawsuit over his 2018 tweet about “financing secured,” in which the businessman questionably claimed to have financing to take over Tesla (NASDAQ:TSLA) private.
“Thank God, the wisdom of the people has prevailed!” Musk tweeted Friday after jurors in a federal civil trial found in his favor. “I am deeply grateful for the unanimous jury finding of not guilty in the Tesla 420 private taking case.”
Class action attorneys representing Tesla (TSLA) shareholders sued for a August 7, 2018, tweet in which Musk wrote: “I’m considering taking Tesla private at $420. Financing secured.”
The tweet sent TSLA up 11% to a high of $387.46 that day, though the shares fell short of $420 when the idea to go private fell through. It also turned out that while Musk had spoken to Saudi investors about providing financing for a private-partnership deal, such financing was arguably not really “secured.”
TSLA shares ultimately plunged as much as 35% intraday a month after Musk’s tweet, and the take-home deal never took place.
The US Securities and Exchange Commission had previously sued Musk over the incident, settling out of court in which he and Tesla (TSLA) paid $20 million each and Musk resigned his presidency of the automaker. electrical. Friday’s jury verdict came in an unrelated case brought by individual shareholders.
Musk testified last month in his own defense at the San Francisco trial, saying the Saudi investors he spoke to “unequivocally” wanted to help take the company private.
And while Telsa (TSLA) originally fell when the take-home deal fell apart, the shares then began a multi-year rally. In November 2021, TSLA peaked at 1,500% above its August 7, 2018 peak after accounting for stock splits.
Even with TSLA’s big pullback over the past year, the stock’s Friday close at $189.98 represents a gain of more than 635% from its August 7, 2018 high after accounting for stock splits.
Seeking Alpha contributors are divided on where Tesla (TSLA) goes from here. Columnist Alpha Investment Research recently made a “Buy” case for the stock, while contributor Sean Chandler gave TSLA a “Sell” rating.
